Bearish Sentiment Among Ethereum Options Traders
Ethereum options traders are exhibiting a predominantly pessimistic outlook regarding its price this month. The second-largest cryptocurrency has experienced a significant decline of 47% since it received an endorsement from Eric Trump, leading to a sell-off among traders and investors alike. Currently, there is a staggering $110 million at stake on Ethereum’s price falling in April. According to data from crypto derivatives platform Deribit, options traders are heavily investing in bearish contracts that will yield returns if Ethereum fails to surpass the $1,800 mark within the month. A significant proportion of these bets anticipates a drop to as low as $1,300.
Market Influences and Short Selling
Zach Burks, CEO of Mintology—a platform focused on NFTs—shared insights with DL News earlier this month, noting that short selling of Ethereum has reached unprecedented levels, driven by institutional investors pushing down its price. He pointed to tariff increases initiated by former President Donald Trump as a critical issue affecting the cryptocurrency sphere, particularly Ethereum. Burks expressed a grim prediction: “Expect Ethereum to plummet to $1,600,” he stated. At the moment, Ethereum’s trading price hovered slightly above $1,600, reflecting a 2% decrease over the past day, contrasting with modest gains observed in Bitcoin and XRP, the largest and third-largest cryptocurrencies, respectively.
Investor Sentiment and Whale Activity
The negative sentiment among Ethereum options traders seems to mirror a broader pessimism among investors regarding the second-largest cryptocurrency. This downturn has prompted significant sell-offs by major investors, including those connected to Trump, such as World Liberty. In February, Eric Trump had claimed it was “a great time to add Ethereum,” but since then, the asset has plummeted over 40%, leading to substantial losses for the Trump family’s crypto initiatives. Recently, the DeFi project liquidated $8 million worth of Ethereum, incurring a staggering 55% loss on their investment.
Declining Activity and Community Sentiment
Ethereum’s current struggles have led to a noticeable decline in its community engagement and overall vibrancy. The cryptocurrency’s price has been lackluster, particularly in the context of a broader market downturn. This recent price decline has also affected major investors with substantial loans secured by Ethereum, with one trader reportedly losing $74 million within the last week. Furthermore, developer participation, a vital indicator of platform vitality, has seen a dramatic 67% drop in weekly code contributions this year. User engagement is also waning, as the count of daily unique traders has reached a twelve-month low. With diminishing optimism, the situation appears grave for Ethereum. “It’s time to face reality,” remarked web3 marketer Stacy Muur last week, emphasizing the shift from a growth period to one of stagnation.
XRP on the Rise
If Ethereum continues its downward trajectory, XRP may emerge as one of the key beneficiaries. Geoff Kendrick, the global head of digital assets research at Standard Chartered Bank, predicts that XRP could potentially surpass Ethereum by 2028. However, not all commentary surrounding Ethereum is bleak. Amid the prevailing skepticism, a BlackRock executive remains hopeful. Robbie Mitchnick, BlackRock’s head of digital assets, stated in March that Ethereum would continue to serve as a foundational element for the asset manager’s tokenization strategy. He also defended the underwhelming performance of Ethereum exchange-traded funds, suggesting that the upcoming addition of staking features could signal a new chapter for these investment vehicles.
